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Women founders of U.S. companies secured a record-high percentage of fundraising dollars in 2023 from venture capitalists despite an overall slowdown in VC funding activity, according to a report from Pitchbook Data and Deloitte.
Women founders and co-founders secured nearly one-quarter (22.8%) of all VC money last year, up from 18.7% in 2022. By deal count, women founders secured about the same percentage of the VC deals as in 2022, at a little over 26%.
In absolute terms, the amount of capital raised by women founders declined along with the overall U.S. market. Women-founded companies raised $34.4 billion, a fall from $44.2 billion raised in 2022 and $61.5 billion raised in 2023.
The number of transactions for which women-founded startups received VC money fell last year also, to 3,313, down from 4,461 in 2022.
“Despite recent headwinds, data reveals remarkable growth in cumulative deal activity for female founders over the past decade, as well as a growing share of the country’s total activity,” according to the PitchBook/Deloitte report. “Female-founded companies continue to build in the face of difficulties.”
Companies with all female founders have fared less well than companies with some female founders. In 2023, all-female-founded companies raised $3.2 billion from VCs, a single-digit percentage of all U.S. VC activity. In comparison, all-male-founded companies raised $114 billion in 2023.
Addressing the discrepancy in the report, Heather Gates, national audit and assurance private growth leader at Deloitte & Touche USA, said: “Part of the challenge is the nature of women-owned businesses and founders’ approaches. Even when they found great businesses, women are less likely to swing for the fences.”
Gates said that instead of pitching their companies as the next member of the Magnificent Seven, “women founders may position them as incremental advances or ‘niche plays.’ Such modesty doesn’t light up the scoreboard for venture funders seeking a healthy return on their capital,” Gates said.
Women in VC Firms
In a study of 315 venture capital firms with $595 billion in assets under management, Pitchbook/Deloitte found that women made up 26% of the investment professionals in 2022, up from 23% in 2020. One-in-five of investment partners was a woman. But they are less likely than men, Gates noted, to represent their VC firm on the boards of portfolio companies, serve as a member of the firm’s investment committee, or serve as an owner of the management company.
However, Gates noted that there are more women in junior-level investment positions in VC firms: 35% of the total in 2023, up from 25% in 2016.
The total capital raised by women-founded companies excludes the $10 billion round raised by OpenAI last year. “The company presents an outlier in terms of the sheer size of the round, and its female founder left the company [before] this round,” said Pitchbook/Deloitte. Including the OpenAI deal, women founders raised 27.8% of all VC money in 2023.
